how are the contributuin margin and operating profit solved for each method? please explain and show steps
Williams Inc. produces a single product, a part used in the manufacture of automobile transmissions. Known for its quality and performance, the part is sold to luxury auto manufacturers around the world. Because this is a quality product, Williams has some flexibility in pricing the part. The firm calculates the price using a variety of pricing methods and then chooses the final price based on that information and other strategic information. A summary of the key cost information follows. Williams expects to manufacture and sell 50,000 parts in the coming year. While the demand for Williams's part has been growing in the past 2 years, management is not only aware of the cyclical nature of the automobile industry, but also concerned about market share and profits during the industry's current downturn. Total Costs Variable manufacturing $ 4,680,000 Variable selling and administrative 855, 650 Facility-level fixed overhead 2,345,875 Fixed selling and administrative 675,495 Batch-level fixed overhead 360,000 Total investment in product line 22,350,000 Expected sales (units) 30,000 Required: 1. Determine the price for the part using a markup of 45% of full manufacturing cost. 2. Determine the price for the part using a markup of 25% of full life-cycle cost. 3. Determine the price for the part using a desired gross margin percentage to sales of 40% 4. Determine the price for the part using a desired life-cycle cost margin percentage to sales of 25%. 5. Determine the price for the part using a desired before tax return on investment of 15% 6. Determine the total contribution margin and total operating profit for each of the methods in requirements 1 through 5. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the total contribution margin and total operating profit for each of the methods in requirements 1 through 5. (Round your intermediate calculations to 4 decimal places.) Method Contribution Margin Operating Profit Markup on full manufacturing cost 5.173.869 3,323,644X Markup on life cycle costs 200 X Price to achieve desired GM% 165x Price to achieve desired LCC % 206 X Price to achieve desired ROA of 15% 171 X S